Join us today for Budget 2015 coverage, where we will have up-to-the-minute details on everything from Leinster House, both here and on our Twitter (@thecollegeview).
Today’s budget is expected to assist low and middle income households. People will hope Minister for Communications and Energy Alex White’s comments on this being the “first budget of recovery” will be seen, but Minister for Finance Michael Noonan’s has been quick to remind the country that it is not out of austerity yet.
DCU students will be interested to see if the €25 million taken from third level education last year is restored (as per rumours) but will savings be offset elsewhere? The price of 20 cigarettes is expected to rise by 40c a box, will a similar increase be put on alcohol too? And how much tax relief will there be?
Noonan will deliver his speech from 2:30pm.
14:28 Michael Noonan begins his speech..
14:29 Economy is “far more favourable” today than for recent budgets.
14:32 2015 deficit forecast: 3.7 per cent. Inside European allowance of 5.1 per cent.
14:33 “Prudent responsible budgeting is how we got to this point. Prudent and responsible budgeting is how we will continue.”
14:35 “Investor confidence in Ireland has been restored.”
14:36 Government income v expenditure for 2015: €65.2 billion v €70.5 billion.
14:37 Noonan will publish “road map” to ensure Ireland continues attracting foreign direct investment.
14:38 “Rate, regime, reputation” key to foreign investment. 12.5 per cent corporate tax rate will not change. Changing it is “not even up for discussion”.
14:42 “Double-Irish” tax being abolished. All companies in Ireland must now be tax residents here, not just by name. A period will be given to companies already set up here to make adjustments, but new companies must be tax residents from now on.
14:43 Farming: No milk quotas from 2015. To encourage land-leasing, income tax exemption on it being increased by 50 per cent. Removing age restriction on leasing (currently 40 years). Howlin says farming currently employees 170,000 here and is our biggest indigenous market.
14:44 €6 million set aside for horse and grey-hound racing development.
14:45 Microbreweries now allowed to brew 30,000 hectolitres, previously 20,000, so the market continues to grow.
14:47 Tourism: retaining 9 per cent VAT rate. Warns market to let savings get through to consumer.
14:48 Abolishing pension levy. The 0.15 per cent introduced for 2015 in 2013 will expire in Dec 2015.
14:50 Removes restrictions on building to free up market and create the houses needed in the country.
14:52 Extending home renovation system to rental properties.
14:53 33 per cent capital gains tax now applies to housing market.
14:55 Will launch public consultation to see if a penalty should be put on land owners who do not develop land they have said they will.
14:59 Income tax: Entry point to USC moved to just above €12000. Lower rate paid moves from 2 per cent to 1.5 per cent. Next band charged at 3.5 per cent instead of 4 per cent. Higher band entry goes from €32,000 to €33,000. Top rate goes 41per cent to 40 per cent of earnings.
11 per cent rate for self-employed earning €100,000+. Top rate USC exemptions for those on social welfare.
“Anyone paying taxes will benefit.” Gives example of person earning 12,000 part time will not pay tax.
15:06 Cigarettes increasing by 40c per 20 pack. Roll-your-own tobacco increase by 20c per 25g pack.
15:07 No increase to motor tax, vehicle registration, or fuel.
15:08 No increase to alcohol.
15:10 Noonan quotes the Robert Frost poem “The Road Less Traveled” to say where Ireland is going.
15:11 Brendan Howlin speaks now.
15:15 There will be €429 million increase on expenditure. Targets social protection; health; education; justice; housing.
15:17 Social housing: Capital investment €2.2 billion in next three years. Will raise over €1.5 billion through direct investment by 2017 (public-private partnership €300 million; Off balance sheet vehicle €400 million; €450 million for social housing). 7,500 social housing units by 2017. 10,000 by 2018.
15:22 Unemployment expected to fall to 10.2 per cent next year.
15:23 No cuts to social welfare schemes.
15:25 New back-to-work family dividend to move families from social welfare to work.
15:26 Child benefit to increase by €5 per child in January. Hope to increase by same amount in 2016.
15:27 Living alone allowance to increase by €9 a week.
15:28 25 per cent bonus to be given to social welfare recipients at Christmas.
15:30 €100 water charge subsidy to benefit 53,000 houses on social welfare schemes. Some TDs shout this is only €2 per week.
15:31 1,700 new full time teaching posts: 920 teachers; 480 resource teachers; 365 special needs assistants.
15:33 Money set aside for more Garda recruitment but no number given.
15:35 New peace programme for Northern Ireland to be funded.
15:38 €212 million increase in spending for Arts, Hertitage and the Gaeltacht.
15:40 Civil service will resume recruiting next year.
15:42 Brendan Howlin finishes his speech
Here are the rumours we heard before the speech was made:
The government has about €900 million at its disposal.
-The Universal Social Charge (USC) bands are expected to rise. The €10,036 entry point will become €12,012. This will help the lowest earners the most.
The Christmas bonus is also expected to come back in some form; maybe a once-off €40/€50 increase in social welfare payments to the long-term unemployed and old-age pensioners (OAPs) come December.
The top rate USC is currently €32,000 but could move to €33,000. People in this band would save around €200 as a result.
A fourth, higher-rate USC band is expected to be introduced to tackle the savings made in other bands.
-Child benefit will increase by €5 per child.
-The top rate of tax could fall from 41 per cent to 40 per cent. This will benefit top earners.
-A rebate in the region of up to €100/ 20 per cent on water charges is expected. This could mean someone spending €500 on water is given €100 off, while someone spending €400 earns €80 off.
-Some 1,000 extra teachers/helpers could be added to current numbers. In addition to this, there might be 200 more special needs assistants.
€25 million taken from third level education last year is to be restored to third level education.
-There will be an additional 200 Gardai introduced, while the government will also set aside money for a new fleet of Garda cars.
-The government could allow €500 million in job support spending. This could be seen in the form of a new regional enterprise package that gets money to start-ups and entrepreneurs.
-Social housing will hope its budget rises from €42 million to €52 million. An additional 7,500 housing units will be built alongside this money.
-The widely talked about “double Irish” corporate tax will probably be addressed. It might be gone by 2020, and could be unavailable to new businesses from this year. To help offset the resulting drop in investors coming to Ireland, the government is expected to create a special tax treatment for top corporate bodies.
The current system allows corporations to take advantage of Ireland’s 12.5 per cent corporate tax rate. The same rate in America is 35 per cent.
-The cost pack of cigarettes might rise by 40c. It had been speculated that this increase would only be 20c. Alcohol is not expected to be changed.
-The Pension levy, due to be wiped out in the next year, will change from 0.75 per cent to 0.15. The tax was originally introduced to help combat the hospitality sector’s low VAT rate, and having raised €600 million this year, has well exceeded what it was brought in for.